Agency costs can be thought of as the loss in the value of a firm resulting from the following actions by managers:
i.reduced effort; II)perks or private benefits; III)empire building; IV)entrenching investments; V)avoiding risks
A)I,II,and V only
B)I,II,and IV only
C)I,II,III,and IV only
D)I,II,III,IV,and V

Question

Quizplus · Accepted Answer

Agency costs arise from conflicts of interest between managers and shareholders, leading to reduced effort, perks, empire building, entrenching investments, and risk avoidance, all of which can decrease firm value.

Agency Costs Can Be Thought of as the Loss in the Value